(NewsWorthy.news) – President Joe Biden has announced that he has made an agreement with French President Emmanuel Macron on how frozen Russian assets are used to aid Ukraine. The European Union together with the Group of Seven are weighing up how to utilize revenue produced by Russian assets to secure financing for Ukraine’s regime for 2025 and provide it with an immediate loan up-front.
Roughly €260 billion, or $280.9 billion, of Russian central bank funds are immobilized globally, most of which is in the EU. Funds generate between €2.5 billion and €3.5 billion in annual profit, which the EU considers a windfall that it does not contractually owe Russia. The US championed the idea to use the funds as a steady stream of revenue to allow for a large $50 billion loan that could be raised. The Kremlin considers any diversion of revenue generated by its frozen funds as theft.
In April Republican House Speaker Mike Johnson suggested partially funding aid to Ukraine by using Russian assets, shortly before a revised and long-stalled $95 billion aid package was passed by the Senate. The bill commits $61 billion to Ukraine, $26 billion to Israel and $8 billion to countering threats from China in the Indo-Pacific and Taiwan.
Johnson argued that authorizing the US government to seize and sell the frozen assets would help cover the costs. The Speaker commented that it would be “pure poetry” to use assets seized from Russian oligarchs following the 2022 invasion to allow Ukrainians to better fight the invaders.
As most of the assets lie in the EU’s hands, however, concerns persist about the proposal. The US plan depends on a revenue stream from the frozen assets that is highly uncertain in nature, and which could be significantly affected if former President Donald Trump re-enters the White House in November and delivers his promise of ending the war in Ukraine in 24 hours. Even in the event of a peace deal that could result in assets being unfrozen, it is unclear whether Trump would commit to making Moscow pay Kyiv war reparations.
The EU is also hesitant to surrender autonomy over its sanctions policy to the White House, and Hungary in particular has opposed changes to its sanctions policy that could further impede diplomacy and negotiations with the Kremlin.
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